The central banks in the GCC region will have to raise interest rates to combat inflation, according to L’AZURDE Chief Executive Officer Selim Chidiac.
“I think due to the costs being pegged to the dollars in this part of the world. The central banks and banks will have to raise interest rates in line with what is happening in the United States,” Chidiac told TRENDS in an interview on the sidelines of the recently held TOP CEO Conference and Awards in Dubai. “Companies have to engage with those rates and the inflation which is slightly increasing in this part of the world in a strategic manner, not a tactical manner (sic)”.
Chidiac said that inflation is an opportunity for a company to review strategically the portfolio of plans it offers. “Do you offer more premium or entry price plans or affordable plans,” he said. “You should review your costs from A to Z, from employees to manufacturing, automation, investment in technology, investment in 3D printing and reviewing of business models.
Gold demand in Egypt, GCC
Chidiac said there is a strong demand for gold and jewellery industry in the GCC and Egypt. “Recently there was certain inflation happening in Egypt of 20 percent in end of march. This did affect somehow, during the month of april, the demand for jewellery,” he said. “However, the Egyptian consumer is resilient. Egypt already went for devaluation a couple of years ago and we saw a quick rebound in demand”.
Within the GCC, Chidiac said, they were doing their best not to raise prices for customers. “We will be investing in R&D and technology and innovation to reduce our manufacturing cost” he said. “In Saudi Arabia we brought back most of the manufacturing onshore”.
L’azurde CEO added that in Saudi Arabia they rely less on suppliers in Asia because of the higher prices from some suppliers and shipping costs. “Therefore many goods which we used to buy externally are now produced onshore in Saudi Arabia and this gives us a major competitive advantage to meet the right consumer prices, ” Chidiac said.
